Tesla President of Automotive Jerome Guillen recently opened up about Tesla’s plans for expanding and optimizing Gigafactory 1 in Sparks, Nevada. As usual, Tesla is keeping a watchful eye on the future with the construction of its new Shanghai Gigafactory, but Gigafactory 1 isn’t yet close to reaching its own max potential.

CNBC recently toured Tesla’s Gigafactory in Sparks, Nevada, during which it took a look at the Model 3 battery pack assembly lines before sitting down to talk with Jerome. In the interview, he opened up about Tesla’s plans to grow its production capacity at Gigafactory 1, building on three main pillars of effort:

Building more battery cell manufacturing lines at the Gigafactory

This is being done in concert with Tesla’s exclusive battery cell manufacturing partner, Panasonic. This not only increases the total production capacity of the Gigafactory, but also allows the company to leverage greater economies of scale, which spreads fixed costs associated with running the company out over a larger volume of batteries.

Tesla needs to build more batteries, as its demand for 2170 lithium-ion battery cells currently outstrips what it can produce at the Gigafactory. As Tesla looks to 2019 and the rollout of the Model 3 to European and Asian markets, it is going to need boatloads of additional battery capacity to support those volumes.

To support that expansion for the near term, it is going to need more batteries from Gigafactory 1. Long term, the company plans to build additional gigafactories in each major market, with the first gigafactory outside of the US being already under construction outside of Shanghai. Another gigafactory is slated for Western Europe, with Elon Musk noting months ago that it would likely be somewhere along the French–German border.

Improving the design of the battery cell manufacturing lines

Tesla lives and breathes innovation and it is this continuous innovation that has driven it to produce cars, energy storage products, and solar products that get better with every generation — sometimes even after they have been sold to customers.

Improving its battery cell manufacturing lines plays out most clearly for its new production lines at GF1 and future gigafactories, but some of those improvements can also be rolled into existing production lines at GF1 in Nevada.

Jerome said that the improvements being made to the battery cell production lines are being made to improve the yield, the throughput, and the capacity of each production line. Squeezing out extra batteries from a single line means Tesla is getting more return on the capital it invested in existing production lines, which translates to lower capex in the long run.

Improving the design of the 2170 battery cell

Tesla started off building its vehicles using commodity 18650 lithium-ion battery cells but did so with a watchful eye to the future, to the day when it would be able to build its own cells. The Gigafactory in Sparks, Nevada, made that dream a reality and ushered in Tesla’s proprietary 2170 form factor, which stretched the diameter of the round 18650 cells 3 mm to a 21 mm diameter and stretched them from 65 mm long to 70 mm long.

The idea was that this 2170 form factor was the perfect blend of energy density — or the amount of energy stored in a given volume — and surface area for cooling. Batteries run hot when being charged and heat management is directly linked to the performance and longevity of the batteries, making heat management one of the key systems in any electric vehicle.

“The design of the cell is not frozen. It evolves and we have a very nice roadmap of technology improvements for the coming years,” Guillen said in the interview. This is consistent with what we know of Tesla and its relentless pursuit of perfection in engineering, design, production, chemistry … you name it. They just don’t stop innovating. (And thank God for that!)

About the Author

Kyle Field I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. TSLA investor.

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